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Trump, Congress Reach Agreement On 2-Year Budget Deal

Congressional leaders have reached a agreement with the White House on a two-year budget deal.
Nicholas Kamm
AFP/Getty Images
Congressional leaders have reached a agreement with the White House on a two-year budget deal.

Update at 6:22 p.m. ET

President Trump announced an agreement on a two-year budget deal and debt-ceiling increase.

The deal would raise the debt ceiling past the 2020 elections and set $1.3 trillion for defense and domestic spending over the next two years.

Congressional sources briefed on the deal said it would suspend the debt limit until July 31, 2021, and include parity in spending increases for defense and domestic programs. It would include about $77 billion in offsets for those spending increases.

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement that the deal "will enhance our national security and invest in middle class priorities that advance the health, financial security and well-being of the American people."

Pelosi said the House would move quickly to send the legislation to Trump to sign "as soon as possible."

Up until Trump's tweet, there had been a lot of mixed signals coming out of the White House.

Trump made some vague, but encouraging comments about negotiations earlier on Monday during a meeting with the Pakistani prime minister.

"We're doing very well on debt limit ... and I think we're doing very well on the budget," the president said about his discussions with Pelosi and GOP leaders on Capitol Hill.

Shai Akabas, Bipartisan Policy Center's director of economic policy, said many people likely would not have felt confident until Trump himself said he supports the deal.

"At various times he has been on board with sort of the fiscally conservative side of wanting to cut spending in opposition to the Democrats priorities," Akabas said of Trump ahead of the announcement. "At some points, he's been wanting to be seen as the dealmaker in chief. He's also got the interest in making sure that we don't route the strong economy that we have right now. So there's a lot of different considerations I think that are being weighed in the administration in these negotiations."

The deal is likely to irritate nearly everyone on Capitol Hill, but that means it is also expected to pass as long as the president pledges to sign it. Republicans have generally resisted debt limit hikes and higher domestic spending without cuts, and Democrats will have to vote for raising defense spending to historic highs, a priority for this administration.

The upside is it is the last short-term budget deal necessitated to avoid automatic across-the-board spending cuts, known as sequester, enacted in a 2011 budget law that was intended to trim $1.2 trillion over the previous decade. The sequester expires in 2021.

Mnuchin has warned Congress that the debt ceiling — the nation's borrowing limit for spending it has already agreed to — would be hit in early September, earlier than anticipated. With Congress set to adjourn for August, Pelosi and Mnuchin had been in near-constant phone contact hammering out the details of a deal that could pass a divided Congress and be signed by Trump.

The House will pass the deal first as that chamber is scheduled to adjourn for the summer on Friday, and the Senate will take it up next week, before it does the same.

NPR White House correspondent Franco Ordoñez contributed to this report

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Susan Davis is a congressional correspondent for NPR and a co-host of the NPR Politics Podcast. She has covered Congress, elections, and national politics since 2002 for publications including USA TODAY, The Wall Street Journal, National Journal and Roll Call. She appears regularly on television and radio outlets to discuss congressional and national politics, and she is a contributor on PBS's Washington Week with Robert Costa. She is a graduate of American University in Washington, D.C., and a Philadelphia native.